We are economists writing about economics: Karl Smith, an assistant professor of economics and government at the School of Government at the University of North Carolina; and Adam Ozimek, an associate at an economics consulting firm. As most in our profession are eager to tell you, economics includes just about everything, so we'll be blogging -- with varying degrees of success -- about the economy, markets, politics, science, technology, philosophy and culture. We both come from a similarly vague libertarian ideological perspective, but we've been called neoliberal as well, and idiosyncratic might be the best adjective to use.

How Does The U.S. Jobs Recovery Compare?

The new jobs report this week finally put the total number of payrolls in the U.S. back to the pre-recession level. Reflections of how long it has taken us to get to this point naturally lead to the question of how this recovery looks in comparison to other recession recoveries? Importantly, there are two ways to look at it that give two different answers.

One point of comparison is to look at the job losses and gains compared to other post-war U.S. recessions. The graph below, courtesy of Calculated Risk, shows that the current recovery is much slower than any of these. The 1980 recession comes in at the shortest by this measure, and the next worst is the 2001 recession. But even 2001 had recovered back to the pre-recession jobs level within 50 months. The current recovery, in contrast, is nearly 80 months out.

This may lead some to conclude that the recovery has been especially poor, perhaps as a result of policy decisions. However, this is not the only relevant comparison. We can also compare the current recovery to other major financial crises. The graph below, from Josh Lehner, shows that in this light the U.S. recover actually doesn’t look so bad.

So which comparison is correct? Given that this recession included a serious financial panic, I’m not sure we learn much from comparing it to, say, the Volcker recession of 1980 that resulted from the attempt to reign in inflation . The comparison to other financial crises is more relevant to understand just how bad things could have been. However, simply showing that it could have been worse does not prove that policymakers could not have done better. Indeed, it would be tough for any simple comparison of recessions to show this. For that you need to take a much closer and more careful examination. But as far as these simple comparisons go, I believe it is more accurate to compare to other financial crises than to compare to other U.S. recessions.

Addendum: Here is another way to think about it. Within the plausible realm of policy choices, could the U.S. have performed closer to the mean of either pack? With respect to the U.S., it would have been much easier for worse policy to have landed us in towards the middle of the financial crisis group than for better policy to land us in the middle of the US recession group.

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